Escolar Documentos
Profissional Documentos
Cultura Documentos
com
_____________________________________________________________________________________________
Copyright 2001 Franchise Business Systems, Inc. All rights reserved.
Rental Income: If you structure it properly, you may be able to charge the corporation rent if it is using any of your property for qualified business purposes: storage, inventory, office space, etc. This may give you a partial tax sheltering since you may then be able to offset this income in part with depreciation deductions, utility, insurance, repairs and maintenance costs associated with the property. The corporation gets to deduct the rental payment and you get money out of the corporation that is not subject to social security, medicare tax, and state payroll tax. This can save upwards of 15.3% in payroll-related taxes alone. Family Members On Payroll: The corporation pays other members of your family besides you for services rendered. The corporation takes a deduction, and the family member in question reports the income. This may have personal income tax advantages if the family member in question is in a much lower tax bracket than you are. Travel Expense: If you can coordinate business purpose travel with personal enjoyment use in an acceptable way, this is a good option to get money out that is deductible to the corporation but nontaxable to you. Could a business convention or trade show be attended in an area you would love to visit? Could a legitimate board of directors' meeting be held in a vacation-like setting? Reimbursements For Use Of Home: Under certain circumstances, a corporation can require an employee to maintain an office in the home and reimburse the employee for the costs. These costs could include the business-use portion of such expenses as utilities, maintenance, insurance, taxes, repairs, and depreciation on the building. This is a possible way for you to get a significant amount of tax-sheltered income out of the business. Use Of Vehicle Reimbursement: If planned correctly, a significant portion of your vehicle expenses can be reimbursed by the corporation for business use. Especially if you are running the business out of your home, the possibility may even exist that the entire cost of at least one of your vehicles could be written off. The corporation gets a deduction for transportation expense, and it is not taxable to you. Lease Various Business Assets To Corporation: If you or a member of your family does a proper lease arrangement for various assets (such as computer equipment, furniture, tools, etc.), the corporation can deduct these lease payments. While these payments are taxable to the recipient, some possible offsetting depreciation and operating deductions may shelter a portionor allof the income leading to a tax advantaged arrangement. Set Up Various Employee Benefit Plans: If it can be handled under IRS qualifying standards, there are a number of fringe benefits you could realizetax free, or tax reducedand the corporation could deduct the cost of providing them. Life insurance, medical insurance, medical reimbursements, educational costs, cafeteria plans, flexible spending accounts, retirement plans, and parking fee reimbursements to name a few. Note that these are not monies coming out of the corporation so much as a direct payment plan, but the results are essentially the same.
_____________________________________________________________________________________________
Copyright 2001 Franchise Business Systems, Inc. All rights reserved.
Conclusion
The most effective, efficient, and tax-saving ways of taking money out of a corporation can sometimes involve serious planning and foresight. The more current and future knowledge you have about such issues as the corporate vs personal tax brackets, cash flow, budgetary needs, income and expenses, and fringe benefits you want for you and your employees, the better the choice of options becomes.
_____________________________________________________________________________________________
Copyright 2001 Franchise Business Systems, Inc. All rights reserved.